New York State is suing prediction market platform, Kalshi, for running an illegal gambling operation in the state.
Kalshi launched in 2021 as a service that allows users to bet money on the outcome of a wide range of future events. In 2025, Kalshi launched sports “trading,” claiming it offered legal sports betting markets, accessible to Americans in all 50 states, and encouraging bettors to wager on the outcomes of major sporting events. Today, Kalshi offers users the ability to bet on events including sports, culture, and elections on its website and app.
State Attorney General Letitia James says an investigation by her office found that Kalshi’s prediction market is an illegal, unlicensed gambling operation. She said Kalshi’s illegal prediction market exposes New Yorkers, including those under the legal gambling age of 21, to serious personal and financial risk. The lawsuit is seeking a court order stopping Kalshi from operating as an unlicensed gambling business and requiring the company to pay fines, forfeit all illegal gains, and pay restitution to users.
The lawsuit alleges that Kalshi’s prediction markets meet the legal definition of gambling because the outcomes of the events on which its users are betting are uncertain and outside the control of the bettor or hinge on a game of chance. Kalshi does not have a license from the New York State Gaming Commission and, is thus, not paying taxes like licensed casinos and mobile sports gambling platforms do. Tax revenue from gambling regulation funds public schools, sports programs for underserved youth, and problem gambling education and treatment.
Kalshi’s prediction markets are also available to users between the ages of 18-20, even though New York law requires a person to be at least 21 years old to participate in mobile sports betting.
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